Friday, March 1, 2013

race and the welfare state

I mentioned previously that Alesina and Glaeser's book had a convincing argument that race plays an important role in the difference between attitudes towards redistribution in the U.S. and Europe. In particular, the racial diversity in the U.S., and strong correlation between poverty and race, causes the median American to be less in favor of redistribution than the median European because they see poverty as an out-group problem. If they identified more closely with those in poverty, they would have a hard time being so against welfare programs. I buy their argument.

But their book also documents striking differences in beliefs and attitudes. Americans, in short, are much more likely to believe that poverty can be escaped with hard work. Can't this also be explained by racial diversity in the U.S.?

What I'm getting at, is that not only is poverty correlated with race, so is economic mobility. For one example, poor Asian immigrants are currently doing much better than poor African Americans, for some reason. We infer that cultural values (like studying hard, strict childrearing, pinching pennies to save for the future) that correlate with race must (overall) have something to do with economic mobility. Therefore, even though we observe about the same average level of economic mobility as Europeans do, we are more confident attributing that mobility to personal choices, rather than luck. If, like in Europe, there were not such a clearly visible proxy variable for those cultural traits, it would appear to be a lot more random who was able to escape from poverty and who wasn't. Europeans don't have the same experiential basis for saying "if group X can consistently pull themselves up by their bootstraps, why can't group Y?"

Alesina and Glaeser show that income mobility is similar between the U.S. and Europe, and yet beliefs and attitudes are consistently different. Despite their honorable attempts to keep normative judgments out of their positive assessment, they betray an unfounded interpretation in which this disparity is evidence of crazy American beliefs, rather than crazy European beliefs. Their evidence proves that beliefs are different, but not which ones are correct.